Visual merchandising

Visual merchandising is the practice in the retail industry of developing floor plans and three-dimensional displays in order to maximize sales.

Both goods and services can be displayed to highlight their features and benefits. The purpose of such visual merchandising is to attract, engage, and motivate the customer towards making a purchase.

Visual merchandising commonly occurs in retail spaces such as retail store].

When the giant nineteenth century dry goods establishments like Marshall Field & Co. shifted their business from wholesale to retail, the visual display of goods became necessary to attract the general consumers. The store windows were often used to attractively display the store's merchandise. Over time, the design aesthetic used in window displays moved indoors and became part of the overall interior store design, eventually reducing the use of display windows in many suburban malls.

In the twentieth century, well-known artists such as Salvador Dalí and Andy Warhol created window displays.

In the beginning of twenty-first century, visual merchandising is forming as a sсience. Nowadays, visual merchandising became one of the major tool of business promotion which is widely used to attract customers and increase sales.

Visual merchandising contributes to a brand's personality and the characteristics associated with the brand. The design of the store should reflect this as part of their retail brand strategy. This includes the in-store environment and brand communications used such as signage and images displayed in-store. These visual elements all play a part in building a retail brand and therefore they help a brand differentiate itself from its competitors, create brand loyalty, and allows for a brand to place premium pricing on their products. Part of the brand strategy used in visual merchandising is research into the brand's target market to find out what their customers’ values and self-images are. This information can allow the retailer to cater the design of a store and their advertising to match their consumers.

In order for retailers to gain an important competitive advantage in the marketplace, visual merchandising is an important factor and an effective way of adding value to their brand. Visual merchandising communicates with customers through elements that stimulate their senses such as lighting, music, aromas, and television screens. (Monash University, 2002). The environment in which a consumer is in can influence the purchasing decisions they make. Research shows that stores that do not communicate well with their customers, such as the retail store having a poor layout can cause customers to incur psychic costs, and may lead to customers being deterred from shopping again as overall shopping pleasure has been reduced. The physical environment is a primary objective in communicating with customers in retail. Research from Thaler shows that consumers are more willing to pay a higher price for a product if the product is purchased in a more favourable environment. This makes customers become more accepting of the higher price, rather than if it were to be sold in an old rundown store. (Baker et al., 2002). Customers can form an important bias of the merchandise quality based on the retail store design environment, and even factors such as employee's interpersonal skills and how they are treated.(Baker et al., 2002)

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